Servitude cancellation

Due to the uncertainty and ambiguity of the Conference Resolution 19 of 2004 pertaining to the lodgement of transfer duty receipts for the recording and cancellation of a personal or praedial servitude, the Chief Registrar of Deeds, in a letter, held the following view:

"As a result of RCR 19/2004 it has become practice in certain deeds registries to call for a transfer duty receipt/exemption certificate in respect of a personal or praedial servitude that has lapsed by virtue of the fact that the servitude served its time, for example the lapsing of a usufruct by the death or remarriage of the person in whose favour it has been registered.

'Transaction', in terms of Section 1 of the Transfer Duty Act, 1949 (Act No.40 of 1949) means "an agreement whereby one party thereto agrees to sell, grant, donate, cede, exchange, lease or otherwise dispose of property to another, or any act whereby any person renounces any interest in or restriction in his favour upon the use or disposal of property." Section 2(1) of Act No. 40 of 1949 states that transfer duty shall be levied "… on the amount by which the value of any property is enhanced by the renunciation, on or after the said date, of an interest in or restriction upon the use or disposal of that property…"

In view of the above-mentioned provisions of the Transfer Duty Act, it is not necessary to call for the lodgement of a duty receipt/exemption certificate where a servitude (interest/restriction) has lapsed after the event that such a servitude was registered for, for example the cancellation of a right of extension that has been registered in terms of Section 25 of Act No. 95 of 1986 [Sectional Titles Act], in instances where all the buildings in the scheme have been erected.

Registrars of Deeds are, in view of the above, advised not to adhere to RCR 19/2005. The said registrars' resolution will be placed as an item on the agenda of the Registrars' Conference 2005 for further discussion."

Republished with permission from SA Deeds Journal

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